The 10-year Treasury yield is one of the most important non-stock indicators because it reflects expectations about the direct of interest rates. That, in turn, can impact growth stocks and the Nasdaq-100.
Today’s chart shows the rapid evolution of the rate environment since the banking crisis emerged in the middle of last month.
First consider the December low of 3.40%. TNX bounced there in February and tried to hold it in March. But yesterday it plowed through that level, ending the session at the low. (It was the lowest close since early September.)
Second, you have the series of lower highs starting on March 14. Combined with the horizontal line at 3.40%, the result could be a descending triangle.
Next, roll back the clock about two months. TNX ripped through a falling trendline after holding 3.40%. It tried to establish a new high above December’s peak but failed. That price action could now look like a failed breakout, with the more recent patterns pointing lower.
This downward movement in yields corresponds to a falling U.S. Dollar and weakening economic data. (Last week’s jobless claims were higher than expected. March manufacturing data missed on Monday, February job openings missed yesterday and ADP’s March private-sector payrolls missed today.)
These points may help confirm a new regime of lower rates and less-hawkish policy from the Federal Reserve.
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
Important Information
TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. When applying for, or purchasing, accounts, subscriptions, products, and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means.
This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: www.tradestation.com/important-information.
Today’s chart shows the rapid evolution of the rate environment since the banking crisis emerged in the middle of last month.
First consider the December low of 3.40%. TNX bounced there in February and tried to hold it in March. But yesterday it plowed through that level, ending the session at the low. (It was the lowest close since early September.)
Second, you have the series of lower highs starting on March 14. Combined with the horizontal line at 3.40%, the result could be a descending triangle.
Next, roll back the clock about two months. TNX ripped through a falling trendline after holding 3.40%. It tried to establish a new high above December’s peak but failed. That price action could now look like a failed breakout, with the more recent patterns pointing lower.
This downward movement in yields corresponds to a falling U.S. Dollar and weakening economic data. (Last week’s jobless claims were higher than expected. March manufacturing data missed on Monday, February job openings missed yesterday and ADP’s March private-sector payrolls missed today.)
These points may help confirm a new regime of lower rates and less-hawkish policy from the Federal Reserve.
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
Important Information
TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. When applying for, or purchasing, accounts, subscriptions, products, and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means.
This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: www.tradestation.com/important-information.
